INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Full and true disclosure - Notice under section 148 issued after expiry of four years

AO issued notice under section 148 for reopening assessment on the ground that assessee-company had taken accommodation entries in form of bogus purchases from various persons. Assessee contended that there was no whisper in the reasons that it failed to disclose truly and fully all material facts necessary for assessment and under such circumstances, the proviso to section 147 would come in play as original assessment was completed under section 143(3) and as four years had expired from the end of the relevant assessment year. Held: In a case where assessment is made under section 143(3) and is sought to be reopened after the expiry of four years from the end of the relevant assessment year, in order to assume jurisdiction under section 147, one of the conditions precedent is that the recorded reasons should point out the failure on the part of the assessee to disclose fully and truly the material facts necessary for assessment. In instant case, it was nowhere recorded in the reasons for re-opening that assessee failed to disclose truly and fully all material facts required for the assessment, therefore, the re-opening was bad in law and hence, the same was quashed.

Followed:Amiya Sales And Industries & Anr. v. Asstt. CIT & Ors. (2005) 274 ITR 25 (Cal): 2005 TaxPub(DT) 0928 (Cal-HC)Distinguished:AG Holdings Pvt. Ltd. v. ITO (2012) 21 taxmann.com 34 (Del): 2012 TaxPub(DT) 3287 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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